The worked question on this page is original educational practice. It is not represented as a question from an official previous-year examination paper.
01 / UNDERSTANDING
Review the question
Use an original classification exercise in which one transaction appears on two balance sheets. If reviewing an authentic paper, record the viewpoint asked rather than memorising isolated answer letters. Change only one fact in the bakery example: replace bank borrowing with an investor subscribing for a new claim. Ask which funding relationship changes and which supplier-payment steps can remain the same, making the comparison test understanding rather than labels.
02 / UNDERSTANDING
The concept in context
Mapping a transaction requires separate questions about ownership, funding and settlement. A household deposit is the customer's asset and the bank's liability. A business loan reverses that perspective. Payment infrastructure moves instructions and settles obligations; it does not automatically supply the borrower's financing.
03 / UNDERSTANDING
A worked learning case
A household places savings in a bank. A nearby bakery borrows to buy an oven, while a supplier receives the bakery's electronic payment. Draw three distinct relationships: deposit funding, the bakery's loan obligation and the payment instruction. The example explains functions without implying that one identified deposit funds one identified loan.
ORIGINAL EDUCATIONAL PRACTICE
Try it before you check.
Is a bank deposit an asset or liability for the bank?
Show the answer and reasoning
A liability.
The bank owes the depositor according to the account terms, so the deposit is a liability on the bank's books. The customer records a claim on the bank as an asset. Always state whose balance sheet you are describing before classifying the same transaction.
Two traps to watch for.
- Treating every financial institution as a deposit-taking bank.
- Confusing a payment message with a grant of credit.
YOUR TOPIC-SPECIFIC LEARNING MAP
Learn from the attempt
Draw the bakery's funding and payment relationships separately.
Label each claim from both parties' balance-sheet perspectives.
Explain what changes when the business raises market finance.
Explain the idea, apply it to a new situation, then check what changed in your reasoning.
BANKERS TUTORIAL · SOURCE NOTES
Keep the source alongside your notes.
Official links provide subject context and authoritative reference material. This guide’s explanation, scenario and question are original Bankers Tutorial learning content.
- iibf.org.in https://iibf.org.in/diploma-banking-finance
- www.iibf.org.in https://www.iibf.org.in/documents/RulesSyllabus/2026/42_DBF-Final_23_2_26%20_Final_website_12_03_2026.pdf
- www.rbi.org.in https://www.rbi.org.in/commonperson/English/Scripts/PressReleases.aspx?Id=2123
For DBF preparation, check the current official notice before relying on changing dates, rules or examination requirements.
